The system used by the HM Revenue and Customs (HMRC) to collect income tax is referred to as self assessment. Today, most citizens register for self assessment online. It can be confusing for some, especially if you are new to this, so Barron & Co Solicitors have drawn up an easy guide.
When registering online, you can either choose to register for GOV.UK Verify service or register through the Government Gateway ID. There is also an option for paper self-assessment, whereby you register by phone or mail. All you need to do is download and fill a form and send it to HMRC. Once you are successfully registered, you’ll receive your 10-digit Unique Tax Reference (UTR) number, which you’ll need for all your future tax returns. Here we shall have a look at the basic information you need in order to register for self assessment.
Where to start
To begin with, start working on bank statement and do a few calculations taking into account the following elements:
1] Employment income: You need a P60 ‘End of Year Certificate’ in case you have more than one job or have other sources of income
2] Self-employment income: Add up all your invoices and every business expense
3] Rental income: The total amount you paid as rent in that financial year
4] Interest: Analyse your bank statements carefully to calculate the total amount paid as interests, including loans, credit cards, as well as the amount accrued as interest
5] Dividends: Refer to your dividend voucher numbers to calculate this if you run a limited company
6] Foreign income: Include the total amount you received from overseas
7] Partnership income: This refers to any income that is received as a result of a partnership undertaking. In such a scenario, each partner is expected to submit his or her own self-assessment.
8] Capital Gains: Mention the amount earned through selling or trading in rental property and shares respectively.
9] Unemployment benefit: This section is for the unemployment benefits received and also includes the P45.
10] Employee benefits: The P11D form is meant to declare the employee benefits received in the form of job perks and so the total amount needs to be calculated.
11] State Benefits: This applies if you receive a pension or any other state benefit and you need to calculate the tax on the same.
12] Charitable Giving: Mention the total amount paid as charitable donations in that year.
Chartered and Tax Accountants in Birmingham
If you are a resident of Birmingham and need help with your tax returns or any other accounting services, simply get in touch with Barron & Co Ltd. We are a Chartered Certified Accountants firm that offers tax accounting, bookkeeping services, small business accounting, and other accounting services. Just give us a call on 01214264155.